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UAE at Most Advanced Stage of Economic Development in the Region


UAE : 26 October 2010

World Economic Forum states competitiveness gap grows wider between the GCC and the Arab region

The worldwide financial crisis has caused the competitiveness gap between the GCC nations and the balance of the Arab region to widen, according to this year’s Arab World Competitiveness Review.

This review was released before the WEF focusing on the MENA (Middle East and North Africa) region.  It found that Kuwait, Saudi Arabia and Qatar are performing well ahead of other locations with similar levels of competitiveness in their economy.  Within the 139 economies surveyed, these three nations rank 35th, 21st and 17th, respectively.

The UAE stands alone as the only economy within the region to have attained the most advanced stage of development, as innovation is the driving force in the nation’s diversified structure.  According to the report, the UAE ranked 23rd placed within this level and 25th overall.

Within the factor-driven economic level (the lowest development stage) Kuwait was ranked in second place.  Egypt (81 overall), Algeria (at 86) and Libya (at 100) all remained within the factor-driven development level and were outperformed by Tunisia and Morocco who climbed to the efficiency-drive stage and ranked 32nd and 75th overall.

The strength in competitiveness throughout the Arab world lies in sound institutions that practice transparency, macroeconomic stability and sophisticated businesses, according to the WEF report.

There is a need for nations to speed up their efforts to increase labour market efficiencies, to move development ahead, reform education and stabilize the financial market.

GCC nations have attained OECD levels in many different index categories including infrastructure and institutions as well as efficient conditions within the goods, financial and labour markets.

The North African region performs better than the Levant region when considering the infrastructure, size of market, innovations and macroeconomic stability.  However, the Levant region pulls ahead of North Africa when considering education and business sophistication, as well as efficient conditions within the goods, financial and labour markets.

Special focus has shown that even though there is greater access to education, quality in most locations is still lacking in terms of the best practices in OECD member states.  Over the last number of years economic reform within the GCC has greatly enhanced quality within the education system, although North Africa and the Levant region have remained stagnant.

Efforts within the last half-decade have enhanced the competitiveness levels in the region and improvements have been seen in primary education, health, higher levels of education and training as well as technological advancements.

As uncertain times shift the world’s focus toward the economies of the developing world, the response of Arab policy makers becomes very important and needs to create an economically sustainable structure for the future, according to founder and executive chairman of the WEF, Klaus Schwab.

In the current worldwide economic environment, fundamentals that support growth and development within the economy are essential for these nations.

Director at the IMF for the Middle East and Central Asia Department, Masood Ahmed, stated that the Mena region needs to improve the competitiveness levels in order to grow quicker, experience more job creation and enjoy the full benefits of globalization.  Doing so will require more quality within education, a favorable environment for business and deeper and more diverse trade flows.

The key to the levels of competitiveness in the Arab world is education, according to Margareta Drzeniek Hanouz who co-authored the review.  Drzeniek Hanouz is a senior economist and director for the Centre of Global Competitiveness and Performance at the WEF.  She stated that even though quality within primary education is up to OECD levels, higher education is out of reach for the majority of the young population and improvements to the quality of that education level have been slower.

Positive changes, such as the gap closing between girls and boys in the education system, have not yet translated into a higher amount of women in the job market.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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